Payroll & Cash Flow Management

samstewart1979

samstewart1979

New member
I'm looking for some advice guys. I went full time with the cleaning business in January of this year. I invoice out for monthly service contracts on the 10th and the 25th of every month, with both being about the same amount of money. For some reason, every month I will go 7-12 days with ZERO checks coming in. By the time something does come in, I have to play catch up from the week before. For a large company, this wouldn't be a problem, but for a smaller company I'm really struggling with this and tired of robbing Peter to pay Paul.

Do any of you offer discounts for early payment? I'm considering a 2% 5 Net 15 type approach. What are your thoughts?
 
You usually have to establish your terms up front. I have offered 1/15 net 30 before. I usually had customers take the one percent no matter when they paid. You could fight to get it, but there were a ton of associated hassles.
That is just how it happened with me. And bet 15, it happens, but not very often
 
You need a little capital, sorry but when I needed cash I hustled cash jobs.

Welcome to owning a business, we fight this when a large customer doesn't pay for months. I had a 50,000 a month and a 48 hold checks during corporate tax file in feb. They didn't pay till may. I have had a couple file bk on over 50,000 one even gave me a bad check.

Big or small we all have these issues. We tighten policy in the last few years.

Now a call is made two to five days after net do with a plan on how they are going to pay.


But if your not funded right nothing will cure this. Larger cash flow only translates to larger problems. I do not recommend using banks. But it sounds like you need a credit line when behind at times until you get your balance sheet right. Warning do not get buried in debt. Use it wise only when needed to extend yourself so you do not have to slow down. Nothing worse than being broke then being broke and working 24/7.

Good luck don't give up


Oct event San Diego free free text me for more details !!
 
You guys get paid in 15 days, 60 - 90 days is typical for many of my clients. You have to learn to save some of the money so you stay ahead and don't fall behind. Hardest part I find is when I get a big job of 3-4 weeks with a bill at the end. I have to hold off on all my other customers for these big jobs, and when they take 60 days to pay after the invoice I feel the pinch. Fuel bills, truck payments, all happen when the money is not coming in. You build up a few months payments then you don't run into this problem. If you are running out of money, you really need to find some more work.
 
Just like mentioned earlier you need a capitol reserve to float you through negative cash flow situations. It takes a while to establish that. Then you have to be prepared for slow periods as well. It's hard when your starting out.
If your doing any residential make them pay at the time of completion. That will help if not doing it already.
 
Right now I'm only about a week behind on my billing. I'm normally behind 4 or 5 weeks though. I just do billing when I stop seeing the checks show up or my wife starts asking if I have any $$$.
 
We do have a credit line, and have tapped it from time to time. I don't tap it now. It was always paid off as soon as a check comes in that it was covering. Part of the joy is establishing the relationships that will help you build your business. As much as we don't like it, having a banker that knows you and knows how your business operates is something vital to growing a business into a larger entity. You also need to establish relationships with attorneys. I have three that I go to for various things. You have to be willing to spend money to make money.
 
Scott Stone said:
We do have a credit line, and have tapped it from time to time. I don't tap it now. It was always paid off as soon as a check comes in that it was covering. Part of the joy is establishing the relationships that will help you build your business. As much as we don't like it, having a banker that knows you and knows how your business operates is something vital to growing a business into a larger entity. You also need to establish relationships with attorneys. I have three that I go to for various things. You have to be willing to spend money to make money.
Click to expand...

++++1
 
Thanks for all the input guys. More sales and more work will always help these issues. I do about 95% commercial work, so one remedy is to concentrate on residential. One person mentioned that above on this thread. The customers taking the 1% and then still paying in 30 days is discouraging. Hopefully if I try that, they will abide by the rules.
 
samstewart1979 said:
Thanks for all the input guys. More sales and more work will always help these issues. I do about 95% commercial work, so one remedy is to concentrate on residential. One person mentioned that above on this thread. The customers taking the 1% and then still paying in 30 days is discouraging. Hopefully if I try that, they will abide by the rules.
Click to expand...

Most have a way to pay you ASAP , Walmart has a cash office and you can get paid on the spot. The trick is the dollar amounts gm can authorize at store level. Try harder , they can.


Oct event San Diego free free text me for more details !!
 
You must log in or register to reply here.
Back
Top